Barclays Wealth posts 27% profit rise as growth plan begins

Barclays Wealth posted a 27% increase in gross profits to £95 million, driven by the growth of its high net worth business.

The growth comes as Barclays  Bank's plans to inject £350 million into its wealth management business have started to gather speed, following the investment of £33 million during the first half of the year. A further £80 million is set to follow during the second half. As a result of the internal investment, which is funded by Barclays Wealth's earnings, operating expenses increased by 20% to £635 million over the six-month period, while impairment charges were also up by £6 million to £27 million.

Through the investment programme, which is focused on hiring client-facing staff and investing in technology, Barclays is hoping its wealth management business will become a top five global player in the wealth management space.

The business saw income rise by 22% during the first half of the year, reflecting the growth in the higher margin high net worth division alongside changes to the bank's internal funds transfer pricing mechanism. This also contributed to a 25% increase in net interest income.

The group attributed a 22% rise in net fee and commission income, which totalled £444 million, to higher
transactional activity among high net worth clients. 

Total client assets comprising deposits and investments were up £2.3 billion to £153.5 billion, with
underlying net new inflows of £3 billion.

Parent bank Barclays, meanwhile, posted a better than expected 44% jump in pre-tax profits to £3.947 billion during the first half of the year, as bad debt charges fell by around a third.

At 9:12 Barclays' shares were trading at 330p, down 9.85p or 2.9% on the day.